ARTICLES

Legal Tests For Mental Capacity

Our annual Law Society fees include some funds set aside for the Vancouver Bar Association’s work on a magazine called “The Advocate”. It’s a monthly publication sent to BC lawyers which includes a lot of litigation related articles, with the odd nugget thrown in for solicitors like us. In the latest issue, a writer commented on the work being done by the BC Law Institute that sounded interesting. So, I hit the BCLI website quickly to do a bit of digging.

The BCLI is an organization that has three purposes:

promote the clarification and simplification of the law and its adaptation to modern social needs;

promote improvement of the administration of justice and respect for the rule of law; and

promote and carry out scholarly legal research.

Of particular interest are 2 of BCLI’s current projects: a look into the need for legislation in the BC related to Franchising (to be discussed in a subsequent blog article), and a study into finding a way to standardize the mental capacity tests done by lawyers on clients who have potential capacity issues. I’ll paste the two paragraph study overview below, but I find this a valuable and timely project given the challenges our society is and will be facing as our baby boomer generation ages. Baby boomers have accumulated significant wealth themselves while receiving significant inheritances from their parents. As this generation ages, wealth transfers will occur and in many families, these transfers may be uneven between siblings. Lawyers will be called upon to determine a person’s capacity by the individual’s spouse or children, or someone looking to challenge a new will, a gift given by a boomer during their lifetime, or a decision by someone when their mental capacity is in question. While we have some basic instructions in legislation and court decisions, it would certainly be a welcome addition to our toolbox to have a specific set of rules to follow when assessing the legal capacity of a client. I haven’t read through the consultation papers just yet, but I am interested to see where the BCLI is directing the government to go on this issue.

Here is the study’s overview:

It is basic law that mental disability or illness does not, in and of itself, leave a person incapable under the law to carry out transactions, enter into relationships, or manage his or her affairs. The law’s focus is on the degree of mental disability or illness. If a person’s mental illness or disability exceeds in degree a legal threshold, then that person will be considered incapable in the eyes of the law. This legal threshold is commonly called a test of capacity.

There is no single, global test of capacity. Instead, the law has developed many different tests of capacity, each geared to specific types of transactions or relationships. Over the past 20 years, British Columbian and Canadian law has seen significant development of legislation relating to mental capacity, which has yielded modern and sophisticated rules on when a person is mentally competent to perform certain tasks or enter into certain transactions. But many areas of the law continue to rely on older common-law tests of capacity, which hold sway in contract law, wills-and-estates law, and family law, among other areas. This project’s goals are to study and illuminate selected common-law tests of capacity, to determine where the current law has shortcomings that require modernization or harmonization, and to recommend legislative reforms to address those shortcomings.